The city of Upper Arlington will pay less to provide health insurance to its employees in 2013 and 2014 than it did this year.
City officials last week trumpeted a new, two-year contract for employee health insurance as a significant victory in continuing attempts to cut municipal spending.
While the move to switch providers for the city's health and stop-loss programs from United Health Care to Medical Mutual of Ohio potentially might save the city only $100,000 next year, the fact that costs aren't going up was considered a welcome development by some.
Those included Upper Arlington City Council members Mike Schadek and Donald Leach, who said it's almost become commonplace for annual health insurance costs to increase by 10 percent or more.
"That's quite an accomplishment, to put it mildly," Leach, council's vice president, said of the new insurance terms.
In 2012, the city contracted with UHC for health and stop-loss insurance. Under the terms of the current contract, the city -- which is self-insured -- will pay UHC up to approximately $3.94 million for its total health and stop-loss program.
Under the new contract council approved Nov. 13 with Medical Mutual, the city's maximum health and stop-loss liability will be approximately $3.84 million in both 2013 and 2014.
The new contract represents a 2.4-percent reduction in health-care costs for the city.
"We got a very aggressive proposal from Medical Mutual," city Finance Director Cathe Armstrong said. "They don't anticipate our claims to be as high as the former carrier."
Upper Arlington secured the new, two-year contract after renegotiating original bids from UHC and Medical Mutual.
The initial bids would have set the city's maximum costs at approximately $4.47 million over the next two years, had UHC been awarded the contract, compared to about $3.96 million with Medical Mutual.
The lower bids were submitted after the city "tweaked" out-of-pocket maximum costs for its 229 full-time employees, Armstrong said.
In 2012, employees on single plans had maximum out-of-pocket health costs of $600, and families paid a maximum of $1,200.
In both 2013 and 2014, those maximum out-of-pocket levels will rise to $1,000 for employees on single plans and $2,000 for those on family plans.
"We were very pleased we were able to obtain this quote," Armstrong said. "Not only did we obtain it, but we're guaranteed to keep it for another year.
"That will just stay as money unspent for the city. It seems like a small portion, but it's $100,000 in real savings that don't have to go out the door."
Armstrong noted that Upper Arlington is on pace to spend less than its maximum claim amount in 2012 and, if the trend holds in 2013 or 2014, its health and stop-loss expenses could be lower than $3.84 million in either year.
The city will incur higher costs for its employee dental plan in 2013, but the increase won't be as high as originally proposed.
In 2013, the city will pay $235,322 to retain Delta Dental as its fully insured dental insurance provider, compared to the $221,172 it was set to spend this year.
The figure represents a 6.4-percent increase over the 2012 contract. However, it is lower than the $245,511 contract Delta Dental originally proposed for 2013.
Under the new dental plan, employees' annual, maximum out-of-pocket costs will be reduced from $2,500 to $1,500.